Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 170.90

-1.3%

3:59 PM EST

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To: Bridge Player who wrote (47394)	11/2/1999 11:49:00 PM
From: LLCF	Read Replies (2) of 152472

FIRE!!!!!!!!! Maybe someone got burned! Or is at least boiling: From a previous post 'GAPS'- Insurance, which of course is what an option contract is, is used in case a major negative 'event' happens... ie. a fire at your house. In the stock market this event is a 'gap' created by any number of things... we've all seen it. Hence many people call 'puts' insurance... you buy them in the case of a huge gap, or crash or other event where there is no continuous market. You pay your premium and get protection, unlike selling calls [they are premium or insurance too, selling them is selling the insurance] which caps your upside and give only limited downside protection. In fact, thinking that one can buy [to cover?] and sell either options or stock to tweak their risk profile on a continuous basis[stoploss orders come under this category] are as mistaken as the guy who says... I don't need fire insurance, I'm right around the corner from the firehouse!!! ie. I'll just buy 'em back before it moves! DAK PS... not advocating put buying, with stocks like Q who needs insurance!<G> Just repeating information on a derivatives strategy overview.

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